|To: richardred who wrote (2029)||3/25/2008 8:11:47 AM|
|China Firms Sink Roots Across the Globe|
Sunday, March 23, 2008
By JUSTIN PRITCHARD, Associated Press Writer
Amid the torrent of clothes, electronics and toys surging out of China comes a little-noticed export: international companies.
For centuries, individual Chinese have sought their fortunes abroad, creating Chinatowns around their restaurants and shops. Now, Chinese firms are going global, pushed by a government turned capitalist, pulled by untapped markets and armed with bundles of money from a thriving economy back home.
Auto plants are popping up in Latin America. A sprawling commodity bazaar promises a provincial Swedish city new life. A car parts distributor is snapping up ailing companies in the U.S. Rust Belt, a TV factory hums in South Africa and a high-tech firm is landing contracts to revamp the Persian Gulf's telecommunication networks.
Just as the earlier arrival of Japanese companies changed U.S. manufacturing, over time Chinese companies could affect how their Western rivals approach innovation, competition and business itself.
"We not only consider ourselves pioneers," says Sean Chen, who at 26 is overseeing the construction of a $100 million electrical parts plant and industrial park in the American South. "We also consider ourselves explorers."
Chen and his fiancee, Joy Chen _ both took American first names _ moved from Shanghai to Atlanta to set up shop for General Protecht Group Inc., a company controlled by his father. While the goal is profits, Sean Chen and his father view the venture almost as a social experiment _ its aim, he said through an interpreter, is to marry the best Chinese and American work practices.
"I want to have the efficiency and execution normally shown by the American employees and the brotherhood that a Chinese company normally shows," Sean Chen says. "There are capitalists and there are socialists and I want to see whether they can get along."
The Chinese corporate presence is still small overseas, but it's growing fast:
_ Chinese companies invested more than $30 billion in foreign firms from 1996 to 2005, nearly one-third in 2004-05 alone, according to an analysis by Usha Haley, a professor of international business at the University of New Haven. Computer maker Lenovo Group helped launch the frenzy in December 2004 by announcing it would acquire IBM Corp.'s personal computer unit for $1.75 billion.
_ In the United States and Canada, Chinese firms now have about 3,500 investment projects, compared to 1,500 five years ago, according to an estimate by Maryville University professor Ping Deng. Large state-owned companies jumped ahead; medium and small private firms are catching up.
Total investment in the U.S. is between $4 billion and $7 billion, Ping estimates. In Europe, Chinese acquisitions last year alone totaled $563.3 million, according to research company Dealogic.
_ Last year, 29 Chinese firms debuted on U.S. stock exchanges, just two shy of the total for the previous three years combined, according to the Bank of New York Mellon Corp.
_ The number of U.S. visas issued to Chinese executives and managers who transfer to U.S. posts within their companies nearly doubled to 2,043 between fiscal years 2004 and 2007. The current fiscal year is on pace to top that, U.S. State Department statistics show.
Chinese businesses are not just establishing offices and factories overseas. They also are developing and selling products under their own brands, rather than simply supplying Western firms in search of cheap manufacturing.
The competition may make it harder for American and European firms to milk early profits from cutting-edge products before reducing prices and releasing them to the mass market. Vulnerable sectors include high-definition TVs, portable DVD players, medical technology, and perhaps even cars, according to Peter Williamson, a professor of international management at the University of Cambridge with extensive China experience.
At the Detroit Auto Show in January, one mid-sized SUV from China with goodies including a leather interior was priced at just $14,000 _ less than half what many comparable cars cost. Models could be available by early next year in nine states.
Chinese firms can use their low-cost manufacturing advantage to pile on additional features. And they can do that by copying taste-making Western firms, circumventing the expense of product development. If the quality is high enough, the strategy can be devastating.
"It will pull to pieces the profit models of their competitors," Williamson says. "It's a classic case of attacking your competitor where you know they're reluctant to respond, because it's very costly."
The dynamic recalls how Japanese auto makers forced their U.S. competitors to make options such as power windows and air conditioning standard.
Unlike the Japanese, whose 1980s arrival in the U.S. was at first greeted as a threat, Chinese businesses are being courted by states including Michigan, California, Illinois and Georgia.
Not that all arms are open.
Congressional scrutiny has dogged several investments, including the billions of dollars that government-owned funds are investing in top Wall Street institutions. National security concerns have scuttled several deals, including the attempted 2005 purchase of oil giant Unocal Corp. and a $2.2 billion bid to buy the tech company 3Com in February.
In the Swedish coastal city of Kalmar, labor union and media criticism has been the backdrop for delayed Chinese plans to open a hotel and wholesale warehouse for Chinese-made commodities. Project manager Angie Qian tromps around, trying to get things done at the speed she was used to in Shanghai.
"China is developing very quickly and so people work very fast and don't plan very far ahead," says Qian, herself a study in constant motion. "In Sweden everything takes a much longer time."
The $160 million project, going up on the site of a shuttered chocolate factory, could help revive a city abandoned by car maker Volvo and train maker Bombardier Transportation.
It wouldn't be the first project of its kind. Dubai boasts an enormous Dragon Mart shopping mall and residential complex; Chinese centers with other backers have opened in Eastern Europe, Italy, England and Russia.
But the Kalmar project faces problems.
Fanerdun Group, the company bankrolling the project, has reportedly not received Chinese government approval to transfer funding from China to Sweden. The company has said it will pay wages of Chinese workers into Chinese bank accounts instead of Swedish accounts.
The national construction workers' union and local media have criticized Fanerdun for not paying some of the Chinese workers who helped prepare the site at all. The issue has delayed construction.
Elsewhere, miscalculations have led to early, and sometimes spectacular, failures. There was the Splendid China theme park in Florida that no one really visited. A group of investors never recovered from the fiasco of trying to evict poor tenants from the downtown Los Angeles hotel they planned to refurbish.
Chinese companies that wither often see the first branch as a trophy, and neglect the long-term strategy that can lead to greater profits, according to business professor Ping. He based his survey on 400 Chinese companies doing business in the U.S. and Europe.
Drastic differences in business culture also can hobble a venture. Western managers can demand more authority than Chinese bosses are accustomed to, and official directives can alienate workers.
For all their energy and drive, many Chinese managers and executives lack formal training. That is changing.
At UCLA's Anderson School of Management, for example, Chinese applications more than doubled from 87 in 2005 to 180 in 2007. The 2007 class had 14 Chinese students, the most in the school's history.
Wife and husband Stella Li and Steven Zhu quit high-profile careers in China to study in Los Angeles. Li is slated to graduate this spring _ Zhu got his MBA last year and landed at Google doing data-driven sales analysis. Both see an opportunity to gain a sophistication in finance and strategy they couldn't get working back home.
"We definitely want to take all the experience and the things we learned in the U.S. back to China," Li said. "But short term, we would like to get more exposure in business here."
Chinese firms are still learning the kinds of data-driven market analysis, branding and other business practices that are commonplace in the West.
"What's scary to think of is when they marry cost consciousness with U.S.-style just-in-time inventory management," says Charles Freeman, a China specialist at the Washington-based Center for Strategic and International Studies, who recalls talking to a cell phone maker that was storing 100 million headsets behind its factory.
Few Chinese companies have been in the U.S. longer than the American subsidiary of the auto parts giant Wanxiang Group, which incorporated in 1993. The founder of the home company is one of China's richest men. His son-in-law, Pin Ni, led the Chicago-area subsidiary from cheap parts supplier up the value chain by buying or working with companies that were distressed _ owing to competition from China.
Wanxiang America Inc. has been welcomed for saving manufacturing jobs. Illinois has proclaimed a Wanxiang Day and Michigan offered the company subsidies.
Pin talks exactly like what he is _ an executive who's part of a multinational. It's all about core competence and optimizing strength and horizontal integration. He casts himself as a matchmaker who spots what disparate firms do best to create as efficient a manufacturing process as possible.
"Even today you want to say, is there enough Chinese companies in the United States?" Pin asks. "I would say no.
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|To: richardred who wrote (1931)||3/25/2008 11:47:30 AM|
|Citigroup says Microsoft likely to raise Yahoo offer|
Tuesday March 25, 9:40 am ET
(Reuters) - Citigroup said it is likely Microsoft Corp (NasdaqGS:MSFT - News) will raise its $31-per-share offer for Yahoo Inc (NasdaqGS:YHOO - News) and upgraded Yahoo shares to "buy" from "hold."
The brokerage also raised its price target on Yahoo's stock to $34 from $31, saying it believed Microsoft remained committed to its offer and "is capable of and willing to" increase that bid to conclude the deal.
"While we continue to see no other competing bidders, we believe Yahoo is aggressively pursuing strategic alternatives," analyst Mark Mahaney said in a note to clients.
One possibility is a tie-up with Time Warner (NYSE:TWX - News), whereby Time Warner would contribute its online content assets to Yahoo in exchange for a stake, the analyst said.
"We believe this could serve as a forcing function to a higher Microsoft bid."
Citigroup said it continues to view a Microsoft-Yahoo deal as the most likely outcome.
Yahoo shares closed at $27.52 Monday on Nasdaq.
(Reporting by Jennifer Robin Raj in Bangalore; Editing by Vinu Pilakkott)
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|To: richardred who wrote (1893)||3/26/2008 12:06:13 AM|
|Multi Packaging Solutions Announces Acquisition of Innovative Creative Packaging Solutions|
Tuesday March 25, 10:12 am ET
NEW YORK--(BUSINESS WIRE)--Multi Packaging Solutions, Inc. (“MPS”), a specialty print and packaging company, and a portfolio company of BSMB, today announced that it has completed the acquisition of Innovative Creative Packaging Solutions.
Innovative Creative Packaging Solutions (“Innovative”), headquartered in South Plainfield, NJ, is a high-quality supplier of custom folding cartons, promotional packaging and digital labels for the Pharmaceutical, Nutraceutical, Medical Devices, and Cosmetic markets. The acquisition provides Innovative Creative Packaging Solutions with product and technology synergies and offers MPS complementary capacity to support its growing customer base. MPS simultaneously signed the acquisition agreement and closed the transaction on March 20th. Terms of the transaction were not disclosed.
Marc Shore, Chief Executive Officer of MPS commented, “Innovative Creative Packaging Solutions strongly complements our existing offering by expanding our manufacturing footprint to include a strategic presence in the Northeast for our healthcare and cosmetics clients. They have an experienced and entrepreneurial management team with a proven track record of customer focus and innovation. We look forward to working with them for continued growth in our target markets.”
Shawn F. Smith, President and CEO of Innovative Creative Packaging Solutions, stated, “We are excited about joining Multi Packaging Solutions, which allows us to offer a comprehensive product line with multiple plant locations, leading ink and coating technologies along with extensive creative and technical resources to new and existing customers.”
“Innovative is a great fit with Multi Packaging Solutions" said Phil Carpenter, Senior Managing Director of BSMB. "We are pleased to continue to support MPS and our management team in executing their organic and acquisition growth strategies.”
About Multi Packaging Solutions:
Multi Packaging Solutions is a leading print and packaging company with sales in excess of $375 million. MPS offers an array of print and packaging for the cosmetic, healthcare, horticultural, media, and value added consumer markets. MPS has 11 production facilities throughout the United States. Founded by Marc Shore with the financial backing of BSMB, MPS has a seasoned management, sales, and design team with vast experience in print and packaging. Unlike traditional packaging companies, MPS is unique in its depth of industry experience, breadth of technologies and range of resources. More information is available at www.multipkg.com.
About Innovative Creative Packaging Solutions:
Innovative Creative Packaging Solutions is a specialty print and packaging company that serves the healthcare and cosmetic markets. Innovative’s cGMP certified facility in South Plainfield, NJ, features offset, flexographic, and digital printing technologies and a full range of finishing equipment. More information on Innovative Creative Packaging Solutions can be found at www.innovativecps.com.
BSMB invests private equity capital in compelling buyouts, recapitalizations and growth capital opportunities alongside superior management teams. Since its formation in 1997, BSMB has been an investor in 67 portfolio companies. BSMB manages over $5 billion of private equity capital. More information about BSMB is available at bsmb.com.
Multi Packaging Solutions
Erin Willigan, 646-885-0157
Melissa Daly, 212-333-3810
Source: Multi Packaging Solutions, Inc.
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|From: richardred||3/26/2008 1:50:53 PM|
|M&A Activity Up in Brazil|
Wednesday March 26, 10:03 am ET
Mergers and Acquisition Activity Up Nearly 15 Percent in Brazil
SAO PAULO, Brazil (AP) -- The value of the merger and acquisition transactions that took place last year in South America's biggest economy was nearly 15 percent higher than the figure posted in 2006, Brazil's National Association of Investment Banks said on Tuesday.
The association said in its annual report that M&A operations totaled 114.2 billion reals ($65 billion) -- 14.9 percent higher than the 99.4 billion reals ($56.50 billion) posted one year earlier.
A total of 135 transactions took place in 2007 compared to the 66 one year earlier. The figures include mergers and acquisitions, corporate restructurings and buyouts, the association said.
"The increased activity seen on Brazilian capital markets in 2007 prompted more M&A operations," the association said its report.
In 2007, Brazilian companies raised 143 billion reals ($81.25 billion) in the debt and equities markets, compared with 120 billion reals in 2006.
According to the association, the industry with the largest volume of M&A deals was the financial sector, representing 31.5 percent of the total, followed by oil and gas, with 12.4 percent.
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|To: richardred who wrote (1384)||3/26/2008 11:18:46 PM|
|From: Glenn Petersen|
|It looks like the Clear Channel deal has finallu fallen apart. It is now time for the lawyers to make a lot of money.|
Clear Channel, Bain, Lee Sue Banks Over Buyout Plan (Update3)
By Don Jeffrey and Phil Milford
March 26 (Bloomberg) -- Bain Capital LLC and Thomas H. Lee Partners LP sued a group of banks led by Citigroup Inc. to force them to honor an agreement to finance the buyout firms' $19.5 billion acquisition of Clear Channel Communications Inc.
Bain and Thomas H. Lee filed complaints in New York state court in Manhattan today, claiming the banks breached their funding commitments. Clear Channel joined the private-equity firms in a suit filed in Texas state court in San Antonio, where the company is based, alleging the banks interfered with the takeover by refusing to provide loans.
The banks ``competed energetically in 2006 for the opportunity to provide more than $22 billion in financing,'' Lee and Bain, both based in Boston, said in one of the New York lawsuits. ``The banks have balked at their obligations due to a simple case of lenders' remorse.''
Citigroup, Deutsche Bank AG, Credit Suisse Group, Morgan Stanley, Royal Bank of Scotland Group and Wachovia Corp. stand to lose at least $2.7 billion because loan prices have tumbled since they agreed to finance the transaction last April. Clear Channel's stock has traded below Bain and Thomas H. Lee's $39.20-a-share offer as credit-market turmoil raised investor concern that the deal wouldn't be completed.
The banks said in a statement that the lawsuits are without merit. In New York, the purchasers asked a judge to order the banks to provide the promised loans. In Texas, Clear Channel asked for an order banning the banks from interfering with the merger agreement and sought more than $26 billion in damages.
`A Deal Is A Deal'
``The financial risk to the banks in this suit dwarfs any risk they think they have in funding the debt,'' Clear Channel Chief Executive Officer Mark Mays said today in a statement.
The buyers said the banks tried to change terms of the lending agreement, including replacing six-year financing with a three-year bridge loan. The banks are attempting to impose terms that ``no responsible purchaser could ever accept,'' Bain and Thomas H. Lee said today in a statement.
Michael Kelly, a managing partner at McCarter & English in Delaware, said the banks will have a hard time defending against the suits.
``A deal is a deal, and you have sophisticated people on both sides,'' Kelly said. ``There's no escape clause in an agreement that says `if the market crashes we get to get out of the deal.' They signed the agreement. If they don't like it now, there's not a lot they can do about it.''
Clear Channel, the largest U.S. radio broadcaster, had its biggest drop in New York Stock Exchange composite trading in almost 19 years today before the lawsuits were announced. The shares fell $5.64, or 17 percent, to $26.92 at 4:15 p.m.
In late trading Clear Channel rose 8.1 percent to $29.10. At that price, the stock is trading at a 25 percent discount to the buyout offer.
The buyout, announced in November 2006, was initially criticized by large investors as being priced too low. Clear Channel approved the purchase after Thomas H. Lee and Bain boosted their bid and offered investors a 30 percent equity stake in the new company. Shareholders voted in favor of the deal in September 2007. Breakup fees are as much as $600 million.
``The bank group presented the sponsors with credit agreements fully consistent and compliant with the commitment letter,'' according to a statement issued by Citigroup spokeswoman Danielle Romero-Apsilos on behalf of the bank group. ``The bank group has been and remains prepared to honor the obligations as set forth in that letter. We believe the suits are without merit and will contest them vigorously.''
Clear Channel said it hired Texas litigator Joe Jamail to handle its lawsuit, which demanded a jury trial. Jamail successfully defended Pennzoil in its 1985 suit against Texaco Inc. over Texaco's acquisition of Getty Oil Co.
Clear Channel filed a lawsuit in Delaware last month against Providence Equity Partners Inc. after the LBO firm sought to back out of the $1.23 billion purchase of 56 television stations. Providence Equity, in turn, sued its lender, Wachovia Corp., which is based in Charlotte, North Carolina. Providence Equity settled the dispute with Clear Channel on March 14, agreeing to buy the stations for a reduced price of $1.1 billion.
Banks retreated from most leveraged buyout lending in June after losses on subprime mortgages began to rise and as much as $400 billion in debt sat unsold and falling in value on their books.
Free-flowing debt allowed buyout firms to undertake a record $745 billion of transactions last year, according to data compiled by Bloomberg. That's changed so far in 2008, with $56 billion of announced deals, a 71 percent drop from a year earlier.
The Clear Channel lawsuits follow unsuccessful attempts by SLM Corp., United Rentals Inc. and Alliance Data Systems Corp. to force completion of takeovers after buyers backed out of the deals.
SLM, the Reston, Virginia-based student-loan company better known as Sallie Mae, dropped a lawsuit in January that sought to require a group led by New York-based buyout firm J.C. Flowers & Co. to pay $900 million in breakup fees. Flowers abandoned a planned $25.3 billion purchase in September.
United Rentals, the largest U.S. construction-equipment rental company, lost a bid in December to get Cerberus Capital Management LP to complete a $4 billion takeover. A Delaware judge ruled the buyout agreement allowed New York-based Cerberus to pull its offer. Cerberus ultimately paid a $100 million breakup fee to the Greenwich, Connecticut-based company.
Alliance Data, a Dallas-based credit-card processor, sued Blackstone Group LP in January, claiming the buyout firm was using regulatory obstacles as an excuse to back out of a $6.6 billion takeover. The company dropped the suit the next month after being convinced that New York-based Blackstone would work to complete the transaction. Alliance accused the firm again on March 17 of breaching its agreement to work with regulators. The deal hasn't been consummated.
The main New York case on the Clear Channel buyout is BT Triple Crown Merger Co. v. Citigroup, 08600899, New York State Supreme Court, County of New York (Manhattan). The Texas case is Clear Channel Communications Inc. and CC Media Holdings Inc. v. Citigroup, 2008CI04864, Texas District Court, Bexar County, Texas.
To contact the reporters on this story: Don Jeffrey in New York at email@example.com; Phil Milford in Wilmington, Delaware, at firstname.lastname@example.org.
Last Updated: March 26, 2008 20:06 EDT
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|To: richardred who wrote (2017)||3/27/2008 12:25:31 AM|
|Dubai Aerospace Enterprise Completes Sale of Landmark Aviation FBO Business to GTCR|
Wednesday March 26, 7:00 am ET
DAE's MRO Operations Move Forward Under Standard Aero Name
DUBAI, UAE--(BUSINESS WIRE)--Dubai Aerospace Enterprise (DAE), the global aerospace manufacturing and services corporation, today announced it has completed the sale of Landmark Aviation’s Fixed Base Operations (FBO) business to GTCR, a leading private equity investment firm for US$435 million.
Today’s announcement marks the culmination of a plan established by DAE as part of its purchase of Landmark Aviation and Standard Aero in August 2007. At that time, DAE announced its intention to divest the Landmark Aviation Airport Services business, which includes 34 fixed base operations, an Aircraft Sales, Charter & Management business, and several small maintenance, repair and overhaul (MRO) operations associated with certain FBO sites in order to concentrate its efforts on the MRO operations of Landmark Aviation and Standard Aero. The sale of the FBO business to GTCR includes the Landmark Aviation name.
In parallel, DAE has, over the past seven months, consolidated the MRO businesses of Landmark Aviation and Standard Aero, which will now operate under a single brand entity, Standard Aero.
DAE is also retaining and looking to grow its Associated Air Center business, previously a business unit of Landmark Aviation located at Dallas Love Field (DAL), USA. It formed part of the original August acquisition and produces luxury and VIP interiors for transport size aircraft.
“Our goal from the initial stage of the acquisition was to focus on building a global MRO operation and divest the FBO business,” said His Excellency Dr. Omar Bin Sulaiman, Managing Director, DAE Group. “I want to commend the management team of DAE for achieving the key benchmarks throughout the process. I had the chance to recently visit Standard Aero’s San Antonio facility and was impressed with the quality of the team, the close collaboration among business units and the commitment to delivering outstanding customer service.”
“We are pleased to have completed this transaction with GTCR,” said Bob Johnson, CEO of Dubai Aerospace Enterprise, adding, “We appreciate the dedication and hard work of the Landmark FBO team, particularly through the sale process, and expect that GTCR will help build the business even further.”
Rob Mionis, CEO of DAE Engineering and Manufacturing, said, “The new Standard Aero is already a major force in the MRO space, with an outstanding workforce and an unparalleled reputation for quality and service and has already made significant steps forward with DAE. It is well positioned to take advantage of opportunities throughout North America and internationally with DAE.”
Since August 2007, the operations of Landmark Aviation Airport Services and the sale process were overseen by an independent board of trustees.
The new Standard Aero business, a DAE Engineering company, has US$1.4 billion in annual revenues. It specializes in engine maintenance, repair and overhaul, and nose-to-tail services that include airframe, interior refurbishments and paint for business and general aviation, air transport, and military aircraft.
Associated Air Center produces luxury and VIP interiors for transport size aircraft. The companies, part of the DAE Engineering division, form a global services network of 12 primary facilities in the U.S., Canada, Europe, Singapore and Australia, with an additional 14 regionally located service and support locations.
DAE is a fast developing global aerospace, manufacturing and services corporation made up of six divisions – DAE Airports, DAE Capital, DAE Engineering, DAE Manufacturing, DAE Services and DAE University.
Headquartered in Dubai, the group is growing through a series of phased developments and acquisitions to become a global player and to produce an integrated aerospace cluster, based at Dubai World Central – the new 140 square kilometer airport and logistics city being constructed in Jebel Ali, Dubai. It is forming international partnerships at the highest level of industry with the aim of establishing one of the most innovative and successful businesses in the global aerospace industry within the next decade.
DAE’s shareholders include EMAAR, ISTITHMAR, Dubai Silicon Oasis (DSO), Dubai International Capital, DIFC Investments LLC, the Government of Dubai and AMLAK Finance.
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|To: richardred who wrote (1976)||3/27/2008 12:47:03 AM|
|Tata to buy Ford brands for $2.3 billion|
Wednesday March 26, 1:39 pm ET
By Sumeet Chatterjee and Kevin Krolicki
MUMBAI/DETROIT (Reuters) - India's Tata Motors Ltd announced a $2.3 billion deal on Wednesday to buy Jaguar and Land Rover from Ford Motor Co, a transaction that gives the Indian automaker a line-up ranging from the world's cheapest car to some of its more expensive.
For Tata, which plans to launch the ultra-cheap $2,500 Nano or "People's Car," the addition of the profitable Land Rover brand provides an edge against Indian rival Mahindra & Mahindra Ltd, which had also pursued a deal with Ford.
Ford, for its part, gets to shed the money-losing Jaguar brand and gains a cash infusion at a time when the U.S. market is slumping and it is attempting to bounce back from combined losses of more than $15 billion over the past two years.
The sale price is roughly 40 percent of what Ford paid for the two brands. Ford acquired Jaguar for $2.5 billion in 1989, but failed to turn the British nameplate into a higher-volume brand. Ford paid $2.75 billion for Land Rover in 2000.
The deal also underscores the shifting balance of power in the global auto industry, where India and other emerging markets are expected to account for almost all of the growth in production over the next five years. None of the established European automakers, including BMW AG or Daimler AG, pursued Jaguar and Land Rover.
They face a new competitor in Tata Group Chairman Ratan Tata, a jet-flying businessman, and his Tata Motors, India's No. 3 car maker and a unit of the far-flung Tata conglomerate that got its start making locomotives after World War Two.
Ford will contribute up to $600 million to Jaguar and Land Rover pension plans after the closing of the deal, expected in the second quarter. Ford will also continue to supply engines and related components, while providing financing for dealers for up to a year, both companies said. Ford will net about $1.7 billion, in line with expectations.
Ford is selling Jaguar and Land Rover to focus on turning around its money-losing operations in North America. Ford says it is on track to return to profitability in 2009, although its restructuring has been complicated by a U.S. economy at risk of tipping into recession and its own more limited success in buying out high-wage union workers, analysts have said.
"It certainly gives them a little bit of cash," Erich Merkle, an analyst at Michigan-based IRN Inc said of the impact of the deal on Ford. "It would stop the bleeding (caused by Jaguar) and allow them to focus resources."
With the deal, Ford disbands its Premier Automotive Group, whose only remaining brand is Volvo. Analysts expect Ford eventually to spin off the safety-oriented Swedish auto brand, but only after returning it to profitability.
Tata Motors shares closed down 0.1 percent at 679.40 rupees in a Mumbai market. Ford shares were down almost 2 percent at $5.90 on the New York Stock Exchange.
NOW THE HARD PART
Analysts have expressed concern about how Tata Motors would fund the deal and how it would fit the luxury brands into its stable of trucks, buses and cars, including the planned Nano, the world's cheapest car.
Tata has announced plans to raise $4 billion, which is expected to help finance the Ford deal and the manufacture of the Nano, which it unveiled in January.
The deal comes at a time when tight credit markets have raised borrowing costs and shut down deals. Standard & Poor's placed Tata Motors on review for a possible downgrade in January, citing the potential increase in its debt load from the acquisition of Jaguar and Land Rover.
The Tata Group has made a number of overseas takeovers in recent years, including last year's $13 billion buy of Anglo- Dutch steelmaker Corus by Tata Steel Ltd.
Kimberly Rodriguez, principal at Grant Thornton, said Tata's track record with acquisitions showed it was willing to run brands independently and said it was likely to do the same with Jaguar and Land Rover, while pouring money into the brands in a way that Ford could not.
"It would be a much more core product line for Tata than it would have been for Ford," Rodriguez said. "Land Rover is critical because it allows them to compete with Mahindra. Jaguar may be a long-term play."
With a market capitalization of $12.8 billion, Ford has seen its value plunge by some 80 percent since 2001, when U.S. auto sales began trending lower.
Ford was advised by Goldman Sachs, HSBC and Morgan Stanley. Tata was advised by JP Morgan and Citigroup.
(Additional reporting by Soyoung Kim in Detroit; Editing by Steve Orlofsky/Andre Grenon)
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|To: richardred who wrote (1976)||3/27/2008 9:53:46 AM|
|Illinois Tool Works To Acquire Quipp|
Thursday March 27, 8:30 am ET
MIAMI, March 27 /PRNewswire-FirstCall/ -- Quipp, Inc. (Nasdaq: QUIP - News), announced the signing of a merger agreement by which Illinois Tool Works Inc. will acquire Quipp for a price between $4.30 and $5.65 per share in cash, with the definitive price to be determined based on adjustments relating to the amount of Quipp's cash and cash equivalents and specified indebtedness prior to consummation of the transaction. Quipp will not proceed with the transaction if the adjusted price would be less than $4.30 per share, which Quipp believes is unlikely. Quipp's Board of Directors unanimously approved the transaction. It is anticipated that the transaction will be completed in the spring or early summer of 2008.
In connection with, and subsequent to, the execution of the merger agreement, the directors and another shareholder of Quipp, who own approximately 12% of Quipp's outstanding common stock, entered into a support agreement under which they have agreed to vote their shares of Quipp common stock in favor of the merger.
Michael S. Kady, President and Chief Executive Officer of the Company, stated: "After a rigorous strategic alternatives evaluation, we strongly believe that our agreement with Illinois Tool Works represents the best alternative for Quipp and its shareholders. The transaction will offer our shareholders a meaningful premium over the current trading price. It also will enable Quipp's employees to become part of a much larger and financially stronger organization. In addition, it should provide excellent cost saving opportunities, including savings resulting from Quipp no longer being subject to the burdens of operating as a stand-alone public company, which have become very expensive over the past few years."
Quipp, Inc., through its operating subsidiary, Quipp Systems, Inc., designs, manufactures and installs material handling systems and equipment to facilitate the automated inserting, assembly, bundling and movement of newspapers from the printing press to the delivery truck.
Illinois Tool Works Inc. is a diversified manufacturer of highly engineered components and industrial systems and consumables. Illinois Tool Works consists of approximately 825 business units in 52 countries and employs some 60,000 people.
Cautionary Note Regarding Forward-looking Statements
This release contains one or more forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, the adjusted price per share in the transaction, opportunities for cost reduction and the expected timing of the closing of the transaction. Forward-looking statements are identified by words such as "will," "expected," "believe" and other similar words. Quipp cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. A variety of known and unknown risks and uncertainties could cause actual results to differ materially from the anticipated results which include, but are not limited to: satisfaction of all regulatory and other conditions required for closing, the ability to obtain the approval of Quipp's shareholders, adverse developments in Quipp's business, and unanticipated expenses. In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of any such forward-looking statements. Quipp does not undertake any obligation to update any forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made.
Additional risks and uncertainties include those detailed from time to time in Quipp's publicly filed documents, including its annual report on Form 10-K for the year ended December 31, 2006 and, when filed, its annual report for the year ended December 31, 2007.
Important Merger Information
This communication may be deemed to be solicitation material in respect of the proposed acquisition of Quipp by Illinois Tool Works Inc. In connection with the proposed acquisition, Quipp intends to file a proxy statement on Schedule 14A with the Securities and Exchange Commission, or SEC, and Quipp intends to file other relevant materials with the SEC. Shareholders of Quipp are urged to read all relevant documents filed with the SEC when they become available, including Quipp's proxy statement, because they will contain important information about the proposed transaction, Quipp and Illinois Tool Works. A definitive proxy statement will be sent to holders of Quipp common stock seeking their approval of the proposed transaction. This communication is not a solicitation of a proxy from any security holder of Quipp.
Investors and security holders will be able to obtain the documents (when available) free of charge at the SEC's web site, sec.gov. In addition, Quipp shareholders may obtain free copies of the documents filed with the SEC when available by contacting Eric Bello, Quipp's Chief Financial Officer, at 305-623-8700. Such documents are not currently available. You may also read and copy any reports, statements and other information filed by Quipp with the SEC at the SEC public reference room at 100 F Street, N.E. Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC's website for further information on its public reference room.
Quipp and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Quipp common stock in respect of the proposed transaction. Information about the directors and executive officers of Quipp is set forth in Quipp's proxy statement which was filed with the SEC on October 31, 2007. Investors may obtain additional information regarding the interest of Quipp and its directors and executive officers in the proposed transaction by reading the proxy statement regarding the acquisition when it becomes available.
Source: Quipp, Inc.
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|To: richardred who wrote (2035)||3/27/2008 9:56:24 AM|
|Clear Channel says wins ruling on $20 billion buyout|
Thursday March 27, 4:29 am ET
NEW YORK (Reuters) - Clear Channel Communications Inc (NYSE:CCU - News) said on Thursday it had won a ruling from a Texas judge that may advance its efforts to force banks to finance a $20 billion buyout of the U.S. radio operator.
Six banks led by Citigroup Inc (NYSE:C - News) were to provide more than $22 billion of financing for the buyout by Bain Capital Partners LLC and Thomas H Lee Partners LP.
But the private equity firms filed lawsuits in New York and Texas on Wednesday, accusing the banks of backing out of their commitments after capital markets deteriorated. Clear Channel joined in the Texas lawsuit.
In a statement, Clear Channel said Judge John Gabriel of the Bexar County district court in Texas found on Wednesday night that the company would suffer irreparable harm if the banks refused to fund the merger.
It said the judge issued a temporary order directing the banks not to interfere with the merger by refusing to fund it or demanding new terms.
San Antonio-based Clear Channel did not answer calls seeking comment. A spokeswoman for Citigroup, which has been speaking on behalf of the bank group, did not immediately return a call for comment.
Other banks in the lending group are Credit Suisse Group (VTX:CSGN.VX - News), Deutsche Bank AG (XETRA:DBKGN.DE - News), Morgan Stanley (NYSE:MS - News), Royal Bank of Scotland Group Plc (LSE:RBS.L - News) and Wachovia Corp
(NYSE:WB - News).
Clear Channel had agreed last May at the height of the private equity boom to be acquired by the private equity firms for $39.20 per share. Since then, banks have become much less willing to make leveraged loans, many of which have lost value because investors have stopped buying them.
The banking group faced losses of about $3 billion to $4 billion on Clear Channel loans, according to a person familiar with the situation, who requested anonymity because he was not authorized to speak.
Clear Channel shares fell $5.69, or 17.5 percent, to $26.87 on Wednesday, after reports that the buyout was in trouble.
(Reporting by Jonathan Stempel, editing by Will Waterman)
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